Hazard Insurance

Hazard insurance or homeowner's insurance as it is more frequently named, is required by your lender when you obtain a loan to purchase a home or town home. Generally, condominiums are exempt from this requirement as exterior coverage is provided in the monthly maintenance fee.

The price you will pay for your hazard insurance policy is largely determined by your credit history and the CLUE Report for your prospective home. CLUE stands for Comprehensive Loss Underwriting Exchange and basically discloses the claims history for the property. CLUE reports can be obtained for a nominal fee through www.choicetrust.com.

Unless your lender waives the hazard insurance escrow, you will be required to pay for your hazard insurance within your monthly mortgage payment, along with your property taxes, principle and interest on your mortgage, often referred to as the PITI payment.